Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports

Executive Summary

In recent decades the airline industry has seen a substantial increase in outsourcing which has undercut job security and lowered wages. This wage erosion has been particularly dramatic for private-sector workers employed in ground-based jobs in America’s airports. The transformation of self-sustaining middle-class airline careers to low-wage outsourced jobs not only hurts workers and their communities, but also may negatively affect the safety, security, and efficiency of airports.

This report examines the extent of outsourcing in the airline industry; trends in wages over the last 20 years; the implications of these trends for workers, customers, and other stakeholders; and the costs and benefits of improving job standards in this industry.

Main Findings

Certain airport occupations faced both substantial increases in outsourcing and dramatic decreases in wages between 2002 and 2012:

Outsourcing of baggage porter jobs more than tripled, from 25 percent to 84 percent, while average hourly real wages across both directly-hired and outsourced workers declined by
45 percent, from over $19 an hour to $10.60 (in 2012 dollars).

Outsourcing of vehicle and equipment cleaning jobs doubled, from 40 percent to 84 percent, while wages fell from the equivalent of over $15 an hour to $11.40, a drop of 25 percent.

Today, even the highest paid outsourced workers in these ground-based airport occupations earn less in real terms than the average directly-hired worker in the same job a decade ago.

More than one-third (37 percent) of cleaning and baggage workers at airports, both directlyhired and outsourced, live in or near poverty. Because of low wages and benefits, a similar share of these workers and their families must rely on public benefit programs to make
ends meet.

Average weekly wages in the airport operations industry generally (excluding air traffic control) did not keep up with inflation, but fell in real terms by 14 percent from 1991 to 2011. Wages for these workers not only grew more slowly than the average rate across all industries, but also grew more slowly than wages in the low-paying food services and retail industries. In 2011, workers in airport operations made an average of $545 a week.

Airports can take steps to address these wage declines. Existing programs to improve airport labor standards have enhanced worker performance and lowered turnover without harming employment or air traffic. Thus far only a small number of airports have made this course
correction to reverse the steep decline in wages for airport workers.